Can Facebook survive its complicated ambition as advertising giant
If you are a Facebook user, one of the 500 million current users, then you have probably noticed the new type of advertising on the right-hand side of your profile page. Nestled among the traditional Facebook ads that you are used to exists a similar style of ad, but with a little twist. The “twist” is the population of friends that you know who have “liked” the ad or the product within the ad. These type of ads are known as “social-context” ads, since it attempts to engage viewers with higher results due to a digital referral from friends.
As any business owner understands, the best advertising is a referral from a friend. This proven concept is exactly what Facebook is trying to push toward advertisers, especially big brand advertisers. They hope that because your friend likes the ad, and you notice that he or she likes the ad, that you will be inclined to immediately trust the “llike”, and you will “like” the ad or product as well.
Of course, like much of what Facebook attempts to do within their social platform, Facebook seems to be riding the fence on how users feel about their privacy. Although users agree (in detailed writing which most people never read) that Facebook has the right to let friends know what they “like”, many users still feel this is an invasion of their privacy. As we all know, that when money is involved, the money usually wins (at least initially), so it’s probably safe to say that Facebook has no intentions of remitting the new “social-context” ads any time soon, especially since users have the ability to set preferences with their “likes” within the settings of their account.
But this discussion of “social-context” ads are really for the big brand players, as the price tag for such a “social-context” ad on the homepage of the site start around $100,000. While their are less costly advertising options such as the cost-per-click advertising model, Facebook is obviously in a big push to prove the new ad style’s effectiveness.
The potential for Facebook’s success with the new ad platform, and for all its advertising platforms currently or in the future, hinge on multiple barriers. First, many advertisers are concerned with the foundational purpose of Facebook which is connecting with friends. When you are on Facebook, you are there to connect, not shop or browse for products. Another barrierer is competition. Competitive forces like Yahoo and Google, who still largely surpass the advertising revenue of Facebook, are more than likely not going anywhere anytime soon. And, their advertising revenue’s are expected to increase, despite Facebook’s attractive growth rate. Finally, many advertisers are concerned with relationship side of Facebook’s advertising department, saying that in the past relationships have been weak or even non-existing.
Our opinion at WhyteSpyder: Well, we can’t predict the future, but we can take a llittle advice from the past with other social giants like MySpace. Facebook, just as MySpace did and failed, seems to continue movement toward more noise and side purposes other than its original intent which got them to where they are today. Social media in general has always had issues on how to generate revenue. But, that’s the point, rights. Many people joined social media sites for a particular purpose, which was to connect to others and to connect for free. The reason for success could be the reason for ultimate demise, as social media platforms become more eager to change business models for higher profits and alienate their core audience. Facebook’s power lies in its ability to share easily. As many users have noticed, Facebook’s platform continues to become more complex, and reasons for that may be for future ambitions to capitalize. And, as users become more aware of Facebook’s purpose and more lost within its platform, the more users will decline to participate. We don’t believe this will happen overnight, or maybe even ever with Facebook, but it won’t be a surprise and unfortunately Facebook may not be missed terribly, as with all aspects of the Web, there is always another giant growing online.